Agriculture is a specific economic activity because its mode of production remained at a lower level in comparison to other industrial companies. Of course, this mainly relates to small agricultural enterprises but to some extent it is also the case with the highly developed agricultural economies, because the process of production may not be the same as in other economic activities. In essence, these differences between agriculture and other economic activities can be clearly seen in accounting records. Through various estimations and calculations as well as through other accounting methods we recognize a little more specific type of recording and use some accounts that are not present in other economic activities. The key difference is found in the strong agricultural subsidies as a powerful instrument for the further development and modernization of agriculture. It should be noted that since its foundation the European Union has directed its budget, as well as the majority of incomes, to agriculture. The main intention of this study is to explore biological process of transformation, which leads to qualitative and quantitative changes in the biological asset - process of growth, quality changes, production and reproduction, each of which can be measured. We will also indicate their economic benefit – how changes in the value of biological assets affect the important income and expenses entries. For a detailed analysis of the problem, we examine the concept and the accounting records of biological transformation process. We also analyze the effects of applying the fair value as an asset evaluating method and the effects of fair evaluation on the balance statements of agricultural enterprises. In addition, the application of accounting methods by which the biological growth is recognized and measured by using the current fair value in relation to the historical cost accounting method is also discussed. The importance of this approach is reflected in the fact that when the biological growth is recognized and measured using the current fair value, the changes in fair value are recorded throughout the whole period, for instance, from planting a tree to its cutting. This method contributes to minimizing the risk of not reporting the income. By testing the research methods, we will use the combined research methods (relevant methodology). This relates primarily to the research through literature, accounting methods, historical methods and other relevant scientific methods (induction, synthesis).

Agriculture, agricultural production, biological assets, accounting, balance, fair value, profit

Presentation: oral